HomeMy WebLinkAboutFriends of the Desert Mtns - Amndmnt to Note Secured by Deed of Trust CITY OF PALM DESERT
OFFICE OF THE CITY MANAGER
STAFF REPORT
REQUEST: APPROVAL OF AMENDMENT TO THE NOTE SECURED BY DEED
OF TRUST TO THE FRIENDS OF THE DESERT MOUNTAINS
SUBMITTED BY: John Wohimuth, City Manager
DATE: December 10, 2009
CONTENTS: Amendment to Note and Deed of Trust
Recommendation
By Minute Motion, approve an Amendment to the Note Secured by Deed of Trust by
and between the Friends of the Mountains (Friends) and the City of Palm Desert
(City).
Backqround
On January 2, 2007, the Friends borrowed One Million Dollars ($1,000,000) from the City.
The City and Friends executed a Note secured by a Deed of Trust recorded as Document
No. 2007-0016687.
The term of the Note was to borrow One Million Dollars ($1,000,000) for 3 years at 5% per
annum. The Note is due on January 9, 2010, and the Friends have been asked to remit the
interest and principle in the amount of$1,150,000.
The Friends desired to borrow $1,000,000 to assist in the purchase of the Valuer property
above Palm Desert adjacent to the National Forest. The Friends were working on an
arrangement whereby State Bond Funds would be secured to pay the Note. The agreement
became complicated and State Funds did not become available, therefore, the Bureau of
Land Management is in the process of appraising the property so that they can utilize
appropriated Federal funds. During the next year, the Friends and the Bureau of Land
Management will attempt to utilize Federal funds from the Land and Water Conservation
Fund to repay the City. The Friends anticipate the process to take between 6 to 9 months.
Staff Report
The Friends of the Desert Mountain
December 10, 2009
Page2of2
Fiscal Analvsis
The Amended Note and Deed of Trust would allow the Friends one additional year and set
the interest at 3% rather than the original 5%. The 5% was set 3 years ago by the Council
as the approximate rate of return on the City's investment in January 2007. The current rate
of return on the City's investment is 1.69%; therefore, staff negotiated a 3% interest for the
extended 1 year loan.
Submitted By: ,
CITY COUNCILAC�iON
�� � APPROVED ✓ DENTEp
1ZECEIVED OTAER
Jo n . Wohl uth, City Manager T G DATE �lD•
AYES � F Q� � �
NOES:
ABSENT:
ABSTAIN:
Paul S. Gibson, Director of Finance IFIED BY: �
Ori�inal oA Flle with CI rk•s Ot�ica
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL
TO:
David Erwin, City Attorney
City of Palm Desert
74760 Highway 11 l, Ste. 200
Indian Wells, CA 92210
Space above for Recorder's Use
AMENDMENT TO NOTE AND
DEED OF TRUST
THIS AMENDMENT TO NOTE AND DEED OF TRUST (the "Amendment") is
entered into as of the day of December, 2009, by and between Friends of the Desert
Mountains, a California Non Profit Public Benefit Corporation ("Trustor" or
`Borrower"), and The City of Palm Desert, a California charter city("Lender" or
`Beneficiary").
RECITALS
A. Borrower executed that certain Note Secured by Deed of Trust
("Note") in the face amount of One Million Dollars ($1,000,000.00) dated January 9,
2006 whereby it promised to pay Lender One Million Dollars ($1,000,000.00) plus
interest at the rate of five percent (5%) per annum with the entire amount of principal and
interest due thirty six months after the date of the Note on January 9, 2010 which was
secured by that certain Deed of Trust with Assignment of Rents effective as of January 9,
2006 and recorded January 9, 2007 as Document 0016687 in the official records of the
County of Riverside (the "Deed of Trust") which encumbers the property designated
therein
B, Borrower is unable to make the payment of principal and interest
due on or before January 9, 2010 under the Note and Lender has agreed in consideration
of the promises made in the Amendment to Promissory Note of even date to extend the
due date by one year and reduce the interest rate effective January 9, 2010 to three
percent(3%)per annum.
WHEREAS, TRUSTOR and BENEFICIARY have agreed to amend the Note and Deed
of Trust as provided herein.
NOW THEREFORE, for valuable consideration, the parties hereto agree as follows:
1
RM B U S�RP ATTERSOM312089
1. Amendments to Note and Deed of Trust:
It is agreed that the amount of principal and interest due under the Note as of
January 9, 2010 is One Million One Hundred and Fifty Dollars ($1,150,000.00) all of
which shall be deemed to be principal.
The due date of the Note is extended from January 9, 2010 to January 9, 2011 and is
subject to such other extensions as the Lender may agree to in its sole and absolute
discretion.
The interest rate under the Note shall be reduced from five percent (5%) per annum
to three percent (3%) per annum effective on January 9, 2010.
2. Except as specifically provided herein, all terms and conditions of the Deed of
Trust shall remain in full force and effect, without waiver or modification. This
Amendment and the Deed of Trust shall be read together as one document.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
"TRUSTOR" Friends of the Desert Mountains, A California Non
Profit Public Benefit Corporation
By:
Title
By:
Title
"BENEFICIARY" The City of Palm Desert, a California charter city
By:
Mayor
ATTEST:
By:
City Clerk
2
RM B U S\RP ATTE RSON\3 I 2089
STATE OF CALIFORNIA
COUNTY OF
On , before me, �
Date Name And Title OfOfficer(e.g.'7ane Doe,Notary Public")
personally appeared �
Namc(s)o C S igncr(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official
seal.
Place Nolary Seal Abovc Signature of Notary Public
STATE OF CALIFORNIA
COUNTY OF
On , before me, ,
Date Name And Ti�le Of Officer(e.g.`9ane Doe,Notary Public")
personally appeared �
Name(s)of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official
seal.
3
RMBUS\RPATTERSON\312089
Placc Notary Scal Above S1�TIl8IUi'C Of NOC3['Y PUb�IC
4
RMB US\RPATTERSON\312089